This should work for most cases (if you don't have an album by "The The"). ;-)

    #!/usr/bin/perl -w

    use strict;

    # List your exceptions here
    my @exceptions = qw(the and or);

    while (my $str = <DATA>) {

        print "Input:  ", $str;

        # Substitute the text in quotes
        $str =~ s{(")([^"]+)(")}
                 {$1 . join('', map ucfirst, split /(\s+|[-])/, $2) . 
+$3}eg;

        # lc the exceptions that don't start a title
        $str =~ s/ $_\b/ $_/gi for @exceptions;

        print "Output: ", $str, "\n";
    }
    __DATA__
    "red hot chili peppers" (group), "by the way" (album title).
    "the go-betweens" (group), "spring hill fair" (album title).
    "jonathan richman" (group), "i, jonathan" (album title).
[download]

This prints:

    Input:  "red hot chili peppers" (group), "by the way" (album title
+).
    Output: "Red Hot Chili Peppers" (group), "By the Way" (album title
+).

    Input:  "the go-betweens" (group), "spring hill fair" (album title
+).
    Output: "The Go-Betweens" (group), "Spring Hill Fair" (album title
+).

    Input:  "jonathan richman" (group), "i, jonathan" (album title).
    Output: "Jonathan Richman" (group), "I, Jonathan" (album title).
[download]

--
John.